Bahrain to have new risk guide­lines

Banking Frontiers - - News Banking In The Gulf -

The Cen­tral Bank of Bahrain is cre­at­ing new re­quire­ments for Is­lamic banks to mea­sure and re­port their ex­po­sure to fi­nan­cial risk. The mea­sure is part of the king­dom’s ef­forts to stan­dard­ize Is­lamic bank­ing and po­si­tion the coun­try as the Is­lamic bank­ing cap­i­tal of the Mid­dle East. The cen­tral bank is ex­pected to pub­lish a con­sul­ta­tion on a pro­posed risk as­sess­ment frame­work for Is­lamic banks in the first quar­ter of 2018, and the fi­nal set of reg­u­la­tions in the sec­ond half of the year. The reg­u­la­tions will re­quire banks to have proper re­serves – be it profit equal­i­sa­tion re­serves or in­vest­ment risk re­serves, and we would like these new rules to set proper stan­dards across the banks in man­ag­ing un­re­stricted in­vest­ment ac­counts. Bahrain is seek­ing to grow its Is­lamic fi­nance sec­tor in the years ahead based on a fore­cast of 5% an­nual growth rate in terms of Is­lamic bank­ing as­sets over the next two years.

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